Reporting its half-year results today, Swick said revenue had dropped 25% to $56.8 million and earnings before interest, tax, depreciation and amortisation were down 58% to $6.8 million.

Swick said lower budgets and cost cutting in the industry had dented drilling demand and several contracts had to be renegotiated or renewed at lower prices.

“It is very disappointing to report a loss to the shareholders,” Swick managing director Kent Swick said.

“The mineral drilling market has been exceptionally difficult and is expected to remain subdued for some time.”

Swick said the company was focused primarily on operating mines and that niche had provided some cushioning in the tough conditions.

On the operational side, metres drilled fell 23% to 564,083m and the number of rigs in use fell 21% to 44.

The company finished the half with $13.5 million in cash and $20.4 million in debt.

Capital expenditure was $8.1 million, with the full year forecast remaining in the vicinity of $15 million.

“The company is very mindful of the responsibility to manage the shareholder’s capital and as a result is being frugal with capital expenditure focusing on what is needed to improve rig efficiency and operating margins including R&D projects, rig upgrades and strategic investments,” Swick said.

“It is a period where capital is being deployed to an upgrade program to increase the capacity of the existing fleet as is required and the progression of high value, low complexity productivity projects.”

Despite posting softer performance, Swick said its forward order book was strong and it was confident earnings would rebound in the second half.

Swick shares were steady at 28c this morning.